President Trump says they're looking into Binance hack as calls grow for crypto rules

Following the $6.3 billion hack of the world's largest crypto exchange, Binance, calls are growing for legislation and for firms like Binance to move onshore.

On Thursday, Binance suffered that blow following what its co-CEO Richard Teng said was caused in part by a compromised DevOps engineer's laptop that gave an attacker access to a service container used to submit unauthorized withdrawal transactions. Blockchain analytics firms like TRM Labs have attributed the attack to TraderTraitor, a hacking unit in North Korea.

During a press conference on Friday afternoon, President Donald Trump said he was looking into the hack, adding that Binance has said they are ensuring customers get their funds back.

"But it's a hack," he said. "That's the problem. You know the old-fashioned way when you used to sign a check… these are different people, never see the money anymore. So I've always felt it was a little bit dangerous."

Earlier on CNBC, Commodity Futures Trading Commission Chair Michael Selig pointed to Binance not being federally regulated by his agency as an issue. On Oct. 5, the agency proposed its federal framework for crypto, specifically for leveraged and margined retail crypto trading and a new registration category for exchanges offering those products.

"This proves our exact point in proposing regulations for crypto markets earlier this month," Selig said. "The real issue here is that these are unregulated offshore exchanges, and they don't have the same safeguards that we have in our financial markets here in the United States."

Binance concerns over the years

Both Republicans and Democrats have expressed concerns about Binance over the past few years, particularly when it came to money laundering and its consumer protections. In 2023, the exchange's previous CEO Changpeng Zhao pleaded guilty to failing to implement adequate anti-money-laundering controls at Binance as part of a sweeping $4 billion settlement. He was later pardoned by Trump.

Whether or not the Clarity Act, broad crypto legislation to regulate exchanges along with other facets of the industry, would have helped freeze the transactions lost in the Binance hack also came up. The bill was passed by the House last year, but has since stalled in the Senate amid concerns over Trump's vast crypto wealth. That wealth had grown to hundreds of millions of dollars linked to World Liberty Financial and his TRUMP memecoin and became something many Democrats could not ignore in trying to pass the bill.

"Yesterday, hackers stole more than $6 billion from Binance in less than 4 hours, the biggest heist in history," said one of the bill's negotiators, Sen. Cynthia Lummis, R-Wyo., in a post on X. "The Clarity Act would have given crypto firms legal cover to freeze suspicious transactions the instant law enforcement calls. Every minute lost is money gone for good."

Amanda Fischer, policy director and chief operating officer for Better Markets and who was the previous chief of staff at the Securities and Exchange Commission, pushed back, saying that the bill would have required stablecoin issuers to "freeze per a court order," adding that at the same time crypto firms worked as quickly as they could to freeze the assets, in a post on X.

However, Solana Policy Institute General Counsel Patrick Wilson said that wasn't right and that a section in the Clarity Act "expressly protected stablecoin issuers from private lawsuits for voluntary, temporary holds based on a reasonable belief of a violation of law. No court order required."

Call to action 

On Friday, The Digital Chamber CEO Cody Carbone sent a letter to House and Senate leadership, demanding that Congress immediately pass a bill that would give the CFTC authority over crypto exchanges and keep customer funds and company funds separate from each other in bankruptcy proceedings.

"No federal regulator can set and enforce consistent standards for how these platforms hold, segregate, and secure customer assets, or for their cybersecurity, before consumers are harmed," Carbone said. "Regulators can only act after the damage is done."

"We urge you to act before this Congress adjourns," he added.

Rep. Tom Timmons, R-S.C., meanwhile, brought up national security concerns.

"America cannot allow rogue regimes to exploit digital assets to finance their nuclear weapons and ballistic missile programs," Timmons said in a post on X.